I’m CEO of Betterment, a company I founded in 2008 to help people invest better. I write about behavioral finance, entrepreneurship, and general FinTech industry commentary. I want to share my knowledge to make your life easier.

Four Financial Steps to Wedding Bliss

An incredible 43% of the general population admitted to not talking finances before marriage, according to a study by American Express. With all the emotion surrounding money, it’s no surprise that financial issues cause trouble once the honeymoon is over.

I recommend newlyweds tackle financial issues head on. It’s a discussion too important to ignore.

A survey on Couples and Money by Lawyers.com, finds that 40% of Americans say that trust about financial issues is more important than honesty regarding infidelity. Joint accounts can help to build trust between couples. The “three pot system” is a trending solution to help couples get organized. It includes one account for shared expenses – like rent, new furniture, and electricity bills – and two separate accounts for each spouse’s personal expenses. As things change, you will want to reassess what is paid for from which account, however this method is a nice way to transition to shared finances and build up that crucial trust.

2. Set an online budget

If you already have joint accounts, it’s easy to establish automatic transfers for paying bills and contributing to savings goals. If you haven’t already, use a tool like mint.com or YNAB.com to put together a plan that works for you and your partner. Communication is a key factor in making the budget achievable. Be sure to have an ongoing dialogue about the budget as your financial situation evolves.

3. Automate your goals

The most important part of a savings plan is the goals you are saving for. It’s important to align your interests and your expectations for these goals – like when you plan on achieving them, how much you need to save now compared to later, or how much you can devote to your personal goals.

You will want to establish different plans of saving action for different goals. Think about them early and start automatic transfers to your savings as soon as possible. Work these goals into your budget and you can look at it as “paying yourself”. Also, baking in savings as a non-negotiable “cost”, like paying bills, is a great way to take the stress out of finding money left over at the end of the month to put toward your goals.

It’s never too early to start planning for retirement and a wedding is the perfect milestone to get you thinking about the future. If your employer provides a 401(k) savings plan, max out your contributions and consider setting up a traditional IRA or Roth IRA in addition to your employer-provided plan. If you do not save for retirement through work, traditional IRAs and Roth IRAs are great tax-advantaged ways to prepare for retirement and those contributions should be maxed out, too. Finally, be on the look out for fees in whichever vehicle of retirement savings you use – I encourage all investors to watch the Frontlinepiece on hidden fees in retail retirement accounts and be cognizant of what they are paying their providers. It’s a powerful piece, and I wrote about it here if you want to know more after watching.

Shared finances are a new territory, but with these steps you can navigate the journey much more smoothly. Congratulations! And good luck.

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